Opening
keynoter Rick Wallace, president and
CEO of KLA-Tencor, invoked Robert Frost prose on the “The Road Not Taken” to illustrate
competing industry views about growth. Wallace contrasted consolidation-driven
industry mergers to what he characterized as more agile productivity-oriented
innovation growth. He rejected dual-source
strategies as the optimal path for the industry and its supply chain and called
for industry to make a more convincing appeal to young talent. In a provocative
differentiation from competitors, Wallace questioned whether “too big to fail
is also too big to innovate.”

Robert C. Fry, senior economist at Dupont, pointed to low but persistent
global economic growth and highlighted positive data for global industrial
production. He forecast global GDP growth of 3.1 percent in 2014 — up from 2.4
percent in 2013. Moreover, he commented on the increasing correlation between
global GDP and semiconductor output, with high tech once again growing faster
than the economy. Fry stated that global leading indexes are trending up, but
not strongly or universally.
Semiconductor shipments are finally setting new highs again and semi
shipments have been trending up for more than a year.

Bill McClean, president of IC Insights, also pointed to better GDP
growth trends, from 2.1 percent (2008-2012) to a forecast of 3.4 percent growth
for 2014. Noting the trend toward mobility, he said that 2014 will be the first
year that communications IC spending surpassed computing IC spending. He
forecast 7 percent semiconductor market growth in 2014 to $350.7 billion and
called for capital equipment spending of $62.3 billion, 9 percent higher than
2013 ($57.2 billion).

Bob Johnson, research VP at Gartner, stated that in the short term,growth will return to
equipment markets in 2014 with annual growth between 16 and 21 percent. He
expects quarterly weakness in the first half of 2014 after a strong fourth
quarter in 2013. Longer term, he sees foundries battling IDMs for supremacy in
mobility markets, technology shifts on the horizon with the advent of 3D NAND
and EUV, and 450mm
implementation beginning by end of 2017.
Also, Johnson said that by 2017, the dominant semiconductor revenue opportunity in the
“Internet of Things” will shift from infrastructure to the “Things,” and that the challenge will be in how to bring
thousands of new products to market rapidly and cheaply.

Mark Thirsk, managing partner at Linx Consulting, discussed chemicals
and materials needed for advanced semiconductor devices and forecast an improved outlook for
2014 with strong Q2 and Q3. A high
upside potential remains in specialty materials for semiconductors, but
significant R&D requirements remain a barrier. Materials demand grows faster than semiconductor
unit growth due to process complexity — with Patterning, CVD and ALD, and CMP
all driving materials demand growth. For the next 3-5 years, 3D packaging and
TSV processing are key areas.

In
the next session, presenters spoke of both the challenges and opportunities
inherent in Pervasive Computing. Nick Yu,
senior VP at Qualcomm, discussed the unprecedented opportunity that the mobile
era offers. Yu stated that what consumers want is a digital “6th
sense,” basically the “augmentation of human ability.” The smartphone experience is also becoming
the expectation in other device categories.
Lama Nachman, principal
engineer at Intel Labs, continued this thought with a presentation on “Context
is Everything,” stating that Intel wants to fundamentally transform the
relationship between humans and computers with “context” — for communication,
introspection, meetings, health, and more.
She said that the platform implications of context include: “always-on”
sensing and computing, low-power sensors and I/O, effective workload
partitioning, and security and privacy.

Dale Ford, VP and
chief analyst at IHS, stated that the semiconductor market growth continues its
cyclicality, with September 2012 beginning a new cycle that will peak in the
second half of 2014. Ford said that
capital expenditures declined by 9 percent in 2012 and an additional 3.7
percent in 2013, with Intel and Samsung transitioning existing capacity for use
on next-generation technology. Pablo
Temprano, senior director at Samsung Semiconductor, also stressed that a
transformation is in progress. Discussing memory growth and investment in the
mobile era, he said that Mobile is driving the Cloud (2013 Capex at $10 billion
for just top 4: Google, Microsoft, Amazon, Facebook). The total memory Capex
Consensus forecast is $16 billion for 2014.

Finally, Rod Morgan, VP at Micron Technology, said that an increasingly
connected lifestyle is driving memory requirements with mobile multi-functional
devices, with embedded sensors and significantly greater memory consumption. Fast
growing memory in a highly interconnected world demand is split across multiple
sub-segments. The $16.4 billion mobile memory segment is a portion of the
overall memory market (RAM $31.0 billion; Flash $26.6 billion). Citing the
reliability, technology and security requirements of these embedded mobile
device microelectronics, Morgan called for greater supply chain collaboration
to enable the network infrastructure be successful. He said, “The pace at which
we enable the infrastructure will determine the speed of innovation.”

Conference speakers on Day 2 and Day 3 of ISS will discuss how
these and other mega-trends are enablers for future growth in Pervasive Computing.

The SEMI Industry Strategy Symposium (ISS) examines global economic,
technology, market, business and geo-political developments influencing the semiconductor
processing industry along with their implications for your strategic business
decisions. For more than 35 years, ISS has been the bellwether semiconductor
conference for senior executives to acquire the latest trend data, technology
highlights and industry perspective to support business decisions, customer
strategies and the pursuit of greater profitability.

About SEMI

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